By Dr Anandadeep Mandal
Birmingham Business School, University of Birmingham
The U.S. presidential election results have a substantial ripple effect on the U.K., influencing areas like economic stability, security cooperation, trade agreements, and global environmental goals. As the U.K.’s closest ally, U.S. leadership plays a pivotal role in shaping U.K.’s policies, especially regarding trade, military partnerships, and joint initiatives on climate change.
Economic Impact and Trade
The U.S. is one of the U.K.’s largest trading partners, accounting for approximately £130 billion ($160 billion) in goods and services in 2022. This trade relationship has been crucial as the U.K. redefined its global trading position post-Brexit. The U.K. government has long aimed to secure a comprehensive U.S.-U.K. trade deal to mitigate economic uncertainties brought on by Brexit, yet progress has been slow. Should a Democratic candidate like Kamala Harris win the presidency, her administration is more likely to support multilateral agreements and trade continuity, potentially speeding up negotiations for a trade agreement favourable to the U.K.
Conversely, another Trump administration might re-emphasise “America First” policies, which in his first term led to increased tariffs and trade barriers. Trump’s approach to trade has historically been protective, as seen with tariffs imposed on aluminium and steel imports in 2018, affecting global markets and causing friction with traditional allies like the U.K. Such policies could be reinstated or even expanded, which might impact the U.K.’s export sectors, from automotive to technology.
Foreign Policy and Security Cooperation
The U.K. and U.S. maintain a robust defence alliance, underscored by joint military operations and NATO commitments. The U.K. is a key NATO ally, and U.S. foreign policy decisions have profound implications for U.K. national security and defence strategy. For instance, Biden’s administration has been heavily supportive of NATO, pledging consistent U.S. presence in Europe, particularly in response to Russian aggression in Ukraine. A Harris administration would likely continue this NATO commitment, maintaining a cooperative security stance that aligns well with U.K. interests in Europe and the broader security of Eastern European nations.
In contrast, Trump’s past suggestions to reduce U.S. involvement in NATO could destabilise the alliance, potentially pressuring the U.K. to increase defence spending to counterbalance reduced American support. Such an outcome might strain the U.K.’s resources, which are already stretched by commitments to post-Brexit adjustments and the economic effects of the COVID-19 pandemic.
A reduced NATO role by the U.S. could also heighten security concerns related to Russian influence in Eastern Europe, forcing the U.K. and other European allies to re-evaluate their regional security strategies independently or with less U.S. support. This recalibration would have significant budget implications, considering the U.K. spent around £48 billion ($60 billion) on defence in 2022 and may need to increase this spending to maintain strategic readiness.
Climate Policy and Environmental Cooperation
Climate policy has become a cornerstone of both U.S. and U.K. foreign policy. The U.K. has committed to net-zero emissions by 2050 and has implemented several policies to support renewable energy and green technology advancements. U.S. leadership in climate agreements, like the Paris Accord, has historically influenced the global commitment to climate action. Harris, as a Democrat, is expected to prioritise climate issues, potentially reinvigorating U.S.-U.K. cooperation on environmental policies and technology-sharing agreements in renewable energy. The U.S. re-joining climate leadership efforts could further align the two countries’ green policies, creating new opportunities for shared advancements in green technology, carbon reduction, and climate finance initiatives.
A second Trump term, however, could disrupt this momentum. During his first term, Trump withdrew the U.S. from the Paris Agreement, undermining international climate initiatives. Should he take similar action in a second term, the U.K. might find itself isolated in its aggressive climate targets, potentially slowing down progress on its green agenda due to lack of U.S. backing.
Market and Currency Repercussions
The election’s outcome also has significant implications for financial markets. The U.K.’s economy, which has been sluggish post-Brexit, could see further instability if the U.S. adopts an unpredictable foreign policy stance. The pound-dollar exchange rate, highly sensitive to political changes, could be impacted by either candidate’s policies. In 2016, Trump’s surprise win led to a dip in the pound due to uncertainty around future trade and foreign policies. Similar market volatility could reoccur if election outcomes in 2024 introduce new uncertainties, especially around trade barriers or military spending shifts that might affect U.K. defence firms that work closely with the U.S.
Global Influence and Diplomatic Relations
The U.K. relies on U.S. influence to maintain its position in global diplomacy. The U.S. has played a significant role in shaping global responses to authoritarian regimes, particularly through sanctions and international treaties. A Democratic administration might continue to apply pressure on nations like Russia and China, fostering a united front with the U.K. and Europe. However, Trump’s foreign policy often took an isolationist approach, emphasising bilateral deals over multilateralism, which could weaken the U.K.’s leverage in broader geopolitical issues and leave European allies more vulnerable to assertive moves by Russia and China.
Additionally, a Harris administration would likely continue support for U.S.-backed financial institutions and agreements, including those that aid the U.K. financially and diplomatically. Trump, on the other hand, previously questioned the value of U.S. contributions to international organisations, which could leave the U.K. and Europe with reduced diplomatic influence.
Conclusion
Ultimately, the results of the U.S. presidential election in 2024 will directly impact the U.K. on multiple fronts. While a Harris administration could provide stability in trade, climate cooperation, and security alliances, a Trump presidency might mean increased isolationist policies, trade challenges, and more unpredictable market conditions. The U.K. will need to brace for strategic shifts in its policies depending on the election outcome, ready to either collaborate with a cooperative partner or navigate a more independent path if the U.S. withdraws from global leadership roles.
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The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of the University of Birmingham.